Correlation Between Live Nation and ESE Entertainment
Can any of the company-specific risk be diversified away by investing in both Live Nation and ESE Entertainment at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Live Nation and ESE Entertainment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Live Nation Entertainment and ESE Entertainment, you can compare the effects of market volatilities on Live Nation and ESE Entertainment and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Live Nation with a short position of ESE Entertainment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Live Nation and ESE Entertainment.
Diversification Opportunities for Live Nation and ESE Entertainment
0.51 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Live and ESE is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding Live Nation Entertainment and ESE Entertainment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ESE Entertainment and Live Nation is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Live Nation Entertainment are associated (or correlated) with ESE Entertainment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ESE Entertainment has no effect on the direction of Live Nation i.e., Live Nation and ESE Entertainment go up and down completely randomly.
Pair Corralation between Live Nation and ESE Entertainment
Considering the 90-day investment horizon Live Nation Entertainment is expected to generate 0.19 times more return on investment than ESE Entertainment. However, Live Nation Entertainment is 5.14 times less risky than ESE Entertainment. It trades about 0.1 of its potential returns per unit of risk. ESE Entertainment is currently generating about 0.01 per unit of risk. If you would invest 6,697 in Live Nation Entertainment on December 1, 2024 and sell it today you would earn a total of 7,639 from holding Live Nation Entertainment or generate 114.07% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 99.8% |
| Values | Daily Returns |
Live Nation Entertainment vs. ESE Entertainment
Performance |
| Timeline |
| Live Nation Entertainment |
| ESE Entertainment |
Live Nation and ESE Entertainment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Live Nation and ESE Entertainment
The main advantage of trading using opposite Live Nation and ESE Entertainment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Live Nation position performs unexpectedly, ESE Entertainment can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in ESE Entertainment will offset losses from the drop in ESE Entertainment's long position.| Live Nation vs. Liberty Media | Live Nation vs. Atlanta Braves Holdings, | Live Nation vs. News Corp B | Live Nation vs. News Corp A |
| ESE Entertainment vs. New Wave Holdings | ESE Entertainment vs. OverActive Media Corp | ESE Entertainment vs. Network Media Group | ESE Entertainment vs. Celtic plc |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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